Bitcoin Investing Simplified

Hi, my name is Alen. I created this guide with the purpose to help you with roadblocks I was also facing as a beginner in Bitcoin and crypto investing. I believe this guide will help you to make investing in Bitcoin easier.

Should you invest in Bitcoin?

What is your reason for investing in Bitcoin? Do you invest just to get rich quickly? If this is the only reason you invest and you don’t believe Bitcoin is the future, there is a high chance you will lose money.

I don’t want to scare you or anything, I just want to be transparent with you. Bitcoin is a highly volatile asset and if you are not backed fundamentally it will be really hard for you to hold Bitcoin when it plunges 30% on the way up.

My advice to you is to do more research from multiple sources and create your own opinion about Bitcoin. I definitely recommend you to read ”The Bitcoin Standard” book.

In the picture below we can see that Bitcoin follows a four-year cycle in historical data, centered around the Bitcoin halving events. On the chart below, halvings are marked with a blue vertical line. Look closely at what is happening with the price after halving.

Bitcoin chart

After halving, Bitcoin usually goes through an advancing phase (green square), followed by a declining phase (red square). You can see on the chart that this repeats itself a few times already.

Declining phases are maybe scary for new investors, but they are actually a great opportunity to buy Bitcoin for cheaper.

Where to buy your first Bitcoin?

When I started investing in Bitcoin I had struggled to find a good place to buy and store Bitcoin. I was trying multiple different Bitcoin wallets and I was transferring Bitcoin up and down and just lost money on expensive fees. If you have similar problems, read this article A guide on how to make your first cryptocurrency investment.

Stress-free investing strategy: dollar-cost averaging

You probably spend eternity thinking should you buy Bitcoin now or wait for a better price? Then Bitcoin goes up and you end up without any position. Or you buy at the top and then Bitcoin goes down and you end up selling. Is that you?

You can solve this problem by implementing one simple strategy called Dollar Cost Averaging. Dollar-Cost Averaging is a strategy where you invest the same amount of money every month or every week. Let’s say for example you invest $100 in Bitcoin on the same day every single month or week.

dollar-cost averaging

This strategy will reduce the emotional component of investing and it will reduce risk. The same strategy can be applied when Bitcoin goes up and you want to sell Bitcoin.

You can also automate this process in Coinbase and then Coinbase will automatically buy Bitcoin or other Crypto for you. Tap the trade button (two arrows) at the bottom of the mobile app, click buy, then select asset you want to buy, tap one-time purchase, select how often

you’d like this purchase to repeat, and then confirm the purchase.

When you get more advanced, you can use a similar strategy to buy Bitcoin. You can cost average only when Bitcoin has a pullback (discount). That way you will buy Bitcoin for cheaper and possibly have a bigger return.

How to safely store Bitcoin?

Before I explain to you what a cold wallet is, you first have to know what a Bitcoin wallet is.

A Bitcoin wallet is a place that stores your digital Bitcoin and validates your transactions when you’re using your Bitcoin. A wallet keeps secret information, called a private key, which is used to validate transactions and “sign” them so that your Bitcoin can be used to make purchases or exchanged for another asset.

crypto wallet

If you hold only a small amount of Bitcoin or other cryptocurrencies, then it’s ok to keep it on Coinbase. But if you have a significant amount of Bitcoin then you should think about storing it safely in a cold wallet. Remember, not your keys, not your Bitcoin.

There are different types of wallets, but the safest is definitely a cold wallet (offline wallet). What makes cold wallet safe is the fact that cold wallet is not connected to the Internet. Cold wallets usually look like USB sticks and they are also protected by pin code or password.

A cold wallet is the only wallet where your Bitcoin is 100% yours because you are the only one that has private keys. 

Check this top Bitcoin wallet for 2022

cold wallet

Final words

Feel free to share this guide with your friends and family. If you need more help you can contact me on my Instagram page. I wish you all the best at investing. See you at the top!

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